interpreted as designed to make it more
convenient for the parties to institute actions
EN BANC
[G.R. No. 119657. February 7, 1997.]
UNIMASTERS CONGLOMERATION,
INC., Petitioner, v. COURT OF APPEALS
and KUBOTA AGRI-MACHINERY
PHILIPPINES, INC., Respondents.
Sebastian Liganor Galinato and Tierra
for Petitioner.
Farcon, Gabriel, Farcon and Associates
for Private Respondent.
SYLLABUS
1. REMEDIAL LAW; ACTION; VENUE;
AGREEMENTS THEREON ARE EXPLICITLY
ALLOWED; RULE. — Rule 4 of the Rules of
Court sets forth the principles generally
governing the venue of actions, whether real
or personal, or involving persons who
neither reside nor are found in the
Philippines or otherwise. Agreements on
venue are explicitly allowed. "By written
agreement of the parties the venue of an
action may be changed or transferred from
one province to another." Sec. 3, Rule 4,
Rules of Court. Parties may by stipulation
waive the legal venue and such waiver is
valid and effective being merely a personal
privilege, which is not contrary to public
policy or prejudicial to the third persons. It
is a general principle that a person may
renounce any right which the law gives
unless such renunciation would be against
public policy.
2. ID.; ID.; ID.; STIPULATION;
RESTRICTIVE OR PERMISSIVE; RATIONALE.
— Written stipulations as to venue may be
restrictive in the sense that the suit may be
filed only in the place agreed upon, or
merely permissive in that the parties may
file their suit not only in the place agreed
upon but also in the places fixed by law
(Rule 4 specifically). As in any other
agreement, what is essential is the
ascertainment of the intention of the parties
respecting the matter. Since convenience is
the raison d’etre of the rules of venue, it is
easy to accept the proposition that normally,
venue stipulations should be deemed
permissive merely, and that interpretation
should be adopted which most serves the
parties’ convenience. In other words,
stipulations designating venues other than
those assigned by Rule 4 should be
1
arising from or in relation to their
agreements; that is to say, as simply adding
to or expounding the venues indicated in
said Rule 4.
3. ID.; ID.; ID.; ID.; GENERALLY REGARDED
AS PERMISSIVE OR COMPLIMENTARY TO
RULE 4 OF THE RULES OF COURT;
EXCEPTION. — An analysis of these
precedents reaffirms and emphasizes the
soundness of the Polytrade principle. Of the
essence is the ascertainment of the parties’
intention in their agreement governing the
venue of actions between them. That
ascertainment must be done keeping in
mind that convenience is the foundation of
venue regulations, and that the construction
should be adopted which most conduces
thereto. Hence, the invariable construction
placed on venue stipulations is that they do
not negate but merely complement or add to
the codal standards of Rule 4 of the Rules of
Court. In other words, unless the parties
make very clear, by employing categorical
and suitably limiting language, that they
wish the venue of actions between them to
be laid only and exclusively at a definite
place, and to disregard the prescription of
Rule 4, agreements on venue are not to be
regarded as mandatory or restrictive but
merely permissive, or complementary of
said rule. The fact that in their agreement
the parties specify only one of the venue
mentioned in Rule 4, or fix a place for their
actions different from those specified by said
rule, does not, without more, suffice to
characterize the agreement as a restrictive
one. There must, to repeat, be
accompanying language clearly and
categorically expressing their purpose and
design that actions between them be
litigated only at the place named by them,
E.G. — "only," "solely," "exclusively in this
court," "in no other court save —,"
"particularly," "nowhere else but/except —,"
etc. regardless of the general precepts of
Rule 4 and any doubt or uncertainty as to
the parties’ intentions must be resolved
against giving their agreement a restrictive
or mandatory aspect. Any other rule would
permit of individual, subjective judicial
interpretations without stable standards,
which could well result in precedents in
hopeless inconsistency.
4. ID.; ID.; VENUE AS DISTINGUISHED
FROM JURISDICTION, CASE AT BAR. — One
last word, respecting KUBOTA’s theory that
the Regional Trial Court had "no jurisdiction
to take cognizance of . . . (UNIMASTER’S)
action considering that venue was
improperly laid." This is not an accurate
statement of legal principle. It equates
venue with jurisdiction; but venue has
nothing to do with jurisdiction except in
criminal actions. This is fundamental. The
action at bar, for the recovery of damages in
an amount considerably in excess of
P20,000.00 is assuredly without the
jurisdiction of a Regional Trial Court. Sec. 19
(8), B.P. 129, The Judiciary Reorganization
Act of 1980. Assuming that venue were
improperly laid in the Court where the action
was instituted, the Tacloban City RTC, that
would be a procedural, not a jurisdictional
impediment precluding ventilation of the
case before that Court of wrong venue
notwithstanding that the subject matter is
within its jurisdiction. However, if the
objection to venue is waived by the failure
to set it up in a motion to dismiss, Sec. 4,
Rule 4, the RTC would proceed in perfectly
regular fashion if it then tried and decided
the action. This is true also of real actions.
Thus, even if a case "affecting title to, or for
recovery of possession, or for partition or
condemnation of, or foreclosure of mortgage
on, real property" were commenced in a
province or city other than that "where the
property or any part thereof lies," if no
objection is seasonably made in a motion to
dismiss, the objection is deemed waived,
and the Regional Trial Court would be acting
entirely within its competence and authority
in proceeding to try and decide the suit.
DECISION
NARVASA, C.J.:
The appellate proceeding at bar turns upon
the interpretation of a stipulation in a
contract governing venue of actions
thereunder arising.
On October 28, 1988 Kubota Agri-Machinery
Philippines, Inc. (hereafter, simply KUBOTA)
and Unimasters Conglomeration, Inc.
(hereafter, simply UNIMASTERS) entered
into a "Dealership Agreement for Sales and
Services" of the former’s products in Samar
and Leyte Provinces. 1 The contract
contained, among others:chanrob1es virtual
1aw library
1) a stipulation reading: ". . . All suits
arising out of this Agreement shall be filed
with / in the proper Courts of Quezon City,"
and
2) a provision binding UNIMASTERS to
obtain (as it did in fact obtain) a credit line
with Metropolitan Bank and Trust Co.-
Tacloban Branch in the amount of
P2,000,000.00 to answer for its obligations
to KUBOTA.
Some five years later, or more precisely on
December 24, 1993, UNIMASTERS filed an
action in the Regional Trial Court of Tacloban
2
City against KUBOTA, a certain Reynaldo Go,
and Metropolitan Bank and Trust Company-
Tacloban Branch (hereafter, simply
METROBANK) for damages for breach of
contract, and injunction with prayer for
temporary restraining order. The action was
docketed as Civil Case No. 93-12-241 and
assigned to Branch 6.
On the same day the Trial Court issued a
restraining order enjoining METROBANK
from "authorizing or effecting payment of
any alleged obligation of . . . (UNIMASTERS)
to defendant . . . KUBOTA arising out of or
in connection with purchases made by
defendant Go against the credit line caused
to be established by . . . (UNIMASTERS) for
and in the amount of P2 million covered by
defendant METROBANK . . . or by way of
charging . . . (UNIMASTERS) for any amount
paid and released to defendant . . .
(KUBOTA) by the Head Office of
METROBANK in Makati, Metro-Manila . . ."
The Court also set the application for
preliminary injunction for hearing on
January 10, 1994 at 8:30 o’clock in the
morning.
On January 4, 1994 KUBOTA filed two
motions. One prayed for dismissal of the
case on the ground of improper venue (said
motion being set for hearing on January 11,
1994). The other prayed for the transfer of
the injunction hearing to January 11, 1994
because its counsel was not available on
January 10 due to a prior commitment
before another court.
KUBOTA claims that notwithstanding that its
motion to transfer hearing had been
granted, the Trial Court went ahead with the
hearing on the injunction incident on
January 10, 1994 during which it received
the direct testimony of UNIMASTERS’
general manager, Wilford Chan; that
KUBOTA’s counsel was "shocked" when he
learned of this on the morning of the 11th,
but was nonetheless instructed to proceed to
cross-examine the witness; that when said
counsel remonstrated that this was unfair,
the Court reset the hearing to the afternoon
of that same day, at which time Wilford
Chan was recalled to the stand to repeat his
direct testimony. It appears that cross-
examination of Chan was then undertaken
by KUBOTA’s lawyer with the "express
reservation that . . . (KUBOTA was) not
(thereby) waiving and/or abandoning its
motion to dismiss;" and that in the course of
the cross-examination, exhibits (numbered
from 1 to 20) were presented by said
attorney who afterwards submitted a
memorandum in lieu of testimonial
evidence. 2
On January 13, 1994, the Trial Court handed
down an Order authorizing the issuance of
the preliminary injunction prayed for, upon a
bond of P2,000,000.00. 3 And on February
3, 1994, the same Court promulgated an
Order denying KUBOTA’s motion to dismiss.
Said the Court:jgc:chanrobles.com.ph
"The plaintiff UNIMASTERS Conglomeration
is holding its principal place of business in
the City of Tacloban while the defendant . . .
(KUBOTA) is holding its principal place of
business in Quezon City. The proper venue
therefore pursuant to Rules of Court would
either be Quezon City or Tacloban City at
the election of the plaintiff. Quezon City and
Manila (sic), as agreed upon by the parties
in the Dealership Agreement, are additional
places other than the place stated in the
Rules of Court. The filing, therefore, of this
complaint in the Regional Trial Court in
Tacloban City is proper."cralaw virtua1aw
library
Both orders were challenged as having been
issued with grave abuse of discretion by
KUBOTA in a special civil action
of certiorari and prohibition filed with the
Court of Appeals, docketed as CA-G.R. SP
No. 33234. It contended, more particularly,
that (1) the RTC had "no jurisdiction to take
cognizance of . . . (UNIMASTERS’) action
considering that venue was improperly laid,"
(2) UNIMASTERS had in truth "failed to
prove that it is entitled to the . . . writ of
preliminary injunction;" and (3) the RTC
gravely erred "in denying the motion to
dismiss." 4 The issue last mentioned, of whether or not
The Appellate Court agreed with KUBOTA
that — in line with the Rules of Court 5 and
this Court’s relevant rulings 6 — the
stipulation respecting venue in its Dealership
Agreement with UNIMASTERS did in truth
limit the venue of all suits arising thereunder
only and exclusively to "the proper courts of
Quezon City." 7 The Court also held that the
participation of KUBOTA’s counsel at the
hearing on the injunction incident did not in
the premises operate as a waiver or
abandonment of its objection to venue; that
assuming that KUBOTA’s standard printed
invoices provided that the venue of actions
thereunder should be laid at the Court of the
City of Manila, this was inconsequential since
such provision would govern "suits or legal
actions between petitioner and its buyers"
but not actions under the Dealership
Agreement between KUBOTA and
UNIMASTERS, the venue of which was
controlled by paragraph No. 7 thereof; and
that no impediment precludes issuance of a
TRO or injunctive writ by the Quezon City
RTC against METROBANK-Tacloban since the
same "may be served on the principal office
of METROBANK in Makati and would be
binding on and enforceable against,
METROBANK branch in
Tacloban." chanroblesvirtuallawlibrary
After its motion for reconsideration of that
3
decision was turned down by the Court of
Appeals, UNIMASTERS appealed to this
Court. Here, it ascribes to the Court of
Appeals several errors which it believes
warrant reversal of the verdict, namely: 8
1) "in concluding, contrary to decisions of
this . . . Court, that the agreement on venue
between petitioner (UNIMASTERS) and
private respondent (KUBOTA) limited to the
proper courts of Quezon City the venue of
any complaint filed arising from the
dealership agreement between . . . (them);"
2) "in ignoring the rule settled in Philippine
Banking Corporation v. Tensuan, 9 that ‘in
the absence of qualifying or restrictive
words, venue stipulations in a contract
should be considered merely as agreement
on additional forum, not as limiting venue to
the specified place;" and in concluding,
contrariwise, that the agreement in the case
at bar "was the same as the agreement on
venue in the Gesmundo case," and
therefore, the Gesmundo case was
controlling; and
3) "in concluding, based solely on the self-
serving narration of . . . (KUBOTA that its)
participation in the hearing for the issuance
of a . . . preliminary injunction did not
constitute waiver of its objection to
venue."cralaw virtua1aw library
the participation by the lawyer of KUBOTA at
the injunction hearing operated as a waiver
of its objection to venue, need not occupy
the Court too long. The record shows that
when KUBOTA’s counsel appeared before the
Trial Court in the morning of January 11,
1994 and was then informed that he should
cross-examine UNIMASTERS’ witness, who
had testified the day before, said counsel
drew attention to the motion to dismiss on
the ground of improper venue and
insistently attempted to argue the matter
and have it ruled upon at the time; and
when the Court made known its intention (a)
"to (resolve first the) issue (of) the
injunction then rule on the motion to
dismiss," and (b) consequently its desire to
forthwith conclude the examination of the
witness on the injunction incident, and for
that purpose reset the hearing in the
afternoon of that day, the 11th, so that the
matter might be resolved before the lapse of
the temporary restraining order on the 13th,
KUBOTA’s lawyer told the Court: "Your
Honor, we are not waiving our right to
submit the Motion to Dismiss." 10 It is plain
that under these circumstances, no waiver
or abandonment can be imputed to KUBOTA.
The essential question really is that posed in
the first and second assigned errors, i.e.,
what construction should be placed on the
stipulation in the Dealership Agreement
that" (a)ll suits arising out of this Agreement
shall be filed with/in the proper Courts of
Quezon City."cralaw virtua1aw library
Rule 4 of the Rules of Court sets forth the
principles generally governing the venue of
actions, whether real or personal, or
involving persons who neither reside nor are
found in the Philippines or otherwise.
Agreements on venue are explicitly allowed.
"By written agreement of the parties the
venue of an action may be changed or
transferred from one province to another."
11 Parties may by stipulation waive the legal
venue and such waiver is valid and effective
being merely a personal privilege, which is
not contrary to public policy or prejudicial to
third persons. It is a general principle that a
person may renounce any right which the
law gives unless such renunciation would be
against public policy. 12
Written stipulations as to venue may be
restrictive in the sense that the suit may be
filed only in the place agreed upon, or
merely permissive in that the parties may
file their suit not only in the place agreed
upon but also in the places fixed by law
(Rule 4, specifically). As in any other
agreement, what is essential is the
ascertainment of the intention of the parties
respecting the matter.
Since convenience is the raison d’etre of the
rules of venue, 13 it is easy to accept the
proposition that normally, venue stipulations
should be deemed permissive merely, and
that interpretation should be adopted which
most serves the parties’ convenience. In
other words, stipulations designating venues
other than those assigned by Rule 4 should
be interpreted as designed to make it more
convenient for the parties to institute actions
arising from or in relation to their
agreements; that is to say, as simply adding
to or expanding the venues indicated in said
Rule 4.
On the other hand, because restrictive
stipulations are in derogation of this general
policy, the language of the parties must be
so clear and categorical as to leave no doubt
of their intention to limit the place or places,
or to fix places other than those indicated in
Rule 4, for their actions. This is easier said
than done, however, as an examination of
precedents involving venue covenants will
immediately disclose.
In at least thirteen (13) cases, this Court
construed the venue stipulations involved as
merely permissive. These are:chanrob1es
virtual 1aw library
1. Polytrade Corporation v. Blanco, decided
in 1969. 14 In this case, the venue
stipulation was as
follows:jgc:chanrobles.com.ph
4
"The parties agree to sue and be sued in the
Courts of Manila."cralaw virtua1aw library
This Court ruled that such a provision "does
not preclude the filing of suits in the
residence of the plaintiff or the defendant.
The plain meaning is that the parties merely
consented to be sued in Manila. Qualifying
or restrictive words which would indicate
that Manila and Manila alone is the venue
are totally absent therefrom. It simply is
permissive. The parties solely agreed to add
the courts of Manila as tribunals to which
they may resort. They did not waive their
right to pursue remedy in the courts
specifically mentioned in Section 2(b) of
Rule 4."cralaw virtua1aw library
The Polytrade doctrine was reiterated
expressly or implicitly in subsequent cases,
numbering at least ten (10).
2. Nicolas v. Reparations Commission,
decided in 1975. 15 In this case, the
stipulation on venue
read:jgc:chanrobles.com.ph
". . . (A)ll legal actions arising out of this
contract . . . may be brought in and
submitted to the jurisdiction of the proper
courts in the City of Manila."cralaw
virtua1aw library
This Court declared that the stipulation does
not clearly show the intention of the parties
to limit the venue of the action to the City of
Manila only. "It must be noted that the
venue in personal actions is fixed for the
convenience of the plaintiff and his
witnesses and to promote the ends of
justice. We cannot conceive how the interest
of justice may be served by confining the
situs of the action to Manila, considering
that the residences or offices of all the
parties, including the situs of the acts
sought to be restrained or required to be
done, are all within the territorial jurisdiction
of Rizal. . . . Such agreements should be
construed reasonably and should not be
applied in such a manner that it would work
more to the inconvenience of the parties
without promoting the ends of
justice."cralaw virtua1aw library
3. Lamis Ents. v. Lagamon, decided in 1981.
16 Here, the stipulation in the promissory
note and the chattel mortgage specified
Davao City as the venue.
The Court, again citing Polytrade, stated
that the provision "does not preclude the
filing of suits in the residence of plaintiff or
defendant under Section 2(b), Rule 4, Rules
of Court, in the absence of qualifying or
restrictive words in the agreement which
would indicate that the place named is the
only venue agreed upon by the parties. The
stipulation did not deprive . . . (the affected
party) of his right to pursue remedy in the
court specifically mentioned in Section 2(b)
of Rule 4, Rules of Court. Renuntiato non
praesumitur."cralaw virtua1aw library
4. Capati v. Ocampo, decided in 1982. 17 In
this case, the provision of the contract
relative to venue was as
follows:jgc:chanrobles.com.ph
". . . (A)ll actions arising out, or relating to
this contract may be instituted in the Court
of First Instance of the City of Naga."cralaw
virtua1aw library
The Court ruled that the parties "did not
agree to file their suits solely and exclusively
with the Court of First Instance of Naga;"
they "merely agreed to submit their disputes
to the said court without waiving their right
to seek recourse in the court specifically
indicated in Section 2 (b), Rule 4 of the
Rules of Court."cralaw virtua1aw library
5. Western Minolco v. Court of Appeals,
decided in 1988. 18 Here, the provision
governing venue
read:jgc:chanrobles.com.ph
"The parties stipulate that the venue of the
actions referred to in Section 12.01 shall be
in the City of Manila."cralaw virtua1aw
library
The court restated the doctrine that a
stipulation in a contract fixing a definite
place for the institution of an action arising
in connection therewith, does not ordinarily
supersede the general rules set out in Rule
4, and should be construed merely as an
agreement on an additional forum, not as
limiting venue to the specified place.
6. Moles v. Intermediate Appellate Court,
decided in 1989. 19 In this proceeding, the
Sales Invoice of a linotype machine stated
that the proper venue should be Iloilo.
This Court held that such an invoice was not
the contract of sale of the linotype machine
in question; consequently the printed
provisions of the invoice could not have
been intended by the parties to govern the
sale of the machine, especially since said
invoice was used for other types of
transactions. This Court said: "It is obvious
that a venue stipulation, in order to bind the
parties, must have been intelligently and
deliberately intended by them to exclude
their case from the reglementary rules on
venue. Yet, even such intended variance
may not necessarily be given judicial
approval, as, for instance, where there are
no restrictive or qualifying words in the
agreement indicating that venue cannot be
laid in any place other than that agreed
upon by the parties, and in contracts of
5
adhesion."cralaw virtua1aw library
7. Hongkong and Shanghai Banking Corp. v.
Sherman, decided in 1989. 20 Here the
stipulation on venue
read:jgc:chanrobles.com.ph
". . . (T)his guarantee and all rights,
obligations and liabilities arising hereunder
shall be construed and determined under
and may be enforced in accordance with the
laws of the Republic of Singapore. We
hereby agree that the Courts in Singapore
shall have jurisdiction over all disputes
arising under this guarantee . . . ."cralaw
virtua1aw library
This Court held that due process dictates
that the stipulation be liberally construed.
The parties did not thereby stipulate that
only the courts of Singapore, to the
exclusion of all the others, had jurisdiction.
The clause in question did not operate to
divest Philippine courts of jurisdiction.
8. Nasser v. Court of Appeals, decided in
1990, 21 in which the venue stipulation in
the promissory notes in question
read:jgc:chanrobles.com.ph
". . . (A)ny action involving the enforcement
of this contract shall be brought within the
City of Manila, Philippines."cralaw virtua1aw
library
The Court’s verdict was that such a provision
does not as a rule supersede the general
rule set out in Rule 4 of the Rules of Court,
and should be construed merely as an
agreement on an additional forum, not as
limiting venue to the specified place.
9. Surigao Century Sawmill Co., Inc. v.
Court of Appeals, decided in 1993. 22 In this
case, the provision concerning venue was
contained in a contract of lease of a barge,
and read as follows:jgc:chanrobles.com.ph
". . . (A)ny disagreement or dispute arising
out of the lease shall be settled by the
parties in the proper court in the province of
Surigao del Norte."cralaw virtua1aw library
The venue provision was invoked in an
action filed in the Regional Trial Court of
Manila to recover damages arising out of
marine subrogation based on a bill of lading.
This Court declared that since the action did
not refer to any disagreement or dispute
arising out of the contract of lease of the
barge, the venue stipulation in the latter did
not apply; but that even assuming the
contract of lease to be applicable, a
statement in a contract as to venue does not
preclude the filing of suits at the election of
the plaintiff where no qualifying or
restrictive words indicate that the agreed
place alone was the chosen venue.

10. Philippine Banking Corporation v. Hon.
Salvador Tensuan, etc., Circle Financial
Corporation, Et Al., decided in 1993. 23
Here, the stipulation on venue was
contained in promissory notes and read as
follows:jgc:chanrobles.com.ph
"I/We hereby expressly submit to the
jurisdiction of the courts of Valenzuela any
legal action which may arise out of this
promissory note."cralaw virtua1aw library
This Court held the stipulation to be merely
permissive since it did not lay the venue in
Valenzuela exclusively or mandatorily. The
plain or ordinary import of the stipulation is
the grant of authority or permission to bring
suit in Valenzuela; but there is not the
slightest indication of an intent to bar suit in
other competent courts. The Court stated
that there is no necessary or customary
connection between the words "any legal
action" and an intent strictly to limit
permissible venue to the Valenzuela courts.
Moreover, since the venue stipulations
include no qualifying or exclusionary terms,
express reservation of the right to elect
venue under the ordinary rules was
unnecessary in the case at bar. The Court
made clear that "to the extent Bautista and
Hoechst Philippines are inconsistent with
Polytrade (an en banc decision later in time
than Bautista) and subsequent cases
reiterating Polytrade, Bautista and Hoechst
Philippines have been rendered obsolete by
the Polytrade line of cases."cralaw virtua1aw
library
11. Philippine Banking Corporation v. Hon.
Salvador Tensuan, etc., Brinell Metal Works
Corp., Et Al., decided in 1994: 24 In this
case the subject promissory notes
commonly contained a stipulation
reading:jgc:chanrobles.com.ph
"I/we expressly submit to the jurisdiction of
the courts of Manila, any legal action which
may arise out of this promissory
note."cralaw virtua1aw library
the Court restated the rule in Polytrade that
venue stipulations in a contract, absent any
qualifying or restrictive words, should be
considered merely as an agreement on
additional forum, not limiting venue to the
specified place. They are not exclusive, but
rather, permissive. For to restrict venue only
to that place stipulated in the agreement is
a construction purely based on technicality;
on the contrary, the stipulation should be
liberally construed. The Court stated: "The
later cases of Lamis Ents v. Lagamon [108
SCRA 1981], Capati v. Ocampo [113 SCRA
794 [1982], Western Minolco v. Court of
Appeals [167 SCRA 592 [1988], Moles v.
Intermediate Appellate Court [169 SCRA
777 [1989], Hongkong and Shanghai
6
Banking Corporation v. Sherman [176 SCRA
331], Nasser v. Court of Appeals [191 SCRA
783 [1990] and just recently, Surigao
Century Sawmill Co. v. Court of Appeals
[218 SCRA 619 [1993], all treaded the path
blazed by Polytrade. The conclusion to be
drawn from all these is that the more recent
jurisprudence shall properly be deemed
modificatory of the old ones."cralaw
virtua1aw library
The lone dissent observed: "There is hardly
any question that a stipulation of contracts
of adhesion, fixing venue to a specified place
only, is void for, in such cases, there would
appear to be no valid and free waiver of the
venue fixed by the Rules of Courts.
However, in cases where both parties freely
and voluntarily agree on a specified place to
be the venue of actions, if any, between
them, then the only considerations should
be whether the waiver (of the venue fixed
by the Rules of Court) is against public
policy and whether the parties would suffer,
by reason of such waiver, undue hardship
and inconvenience; otherwise, such waiver
of venue should be upheld as binding on the
parties. The waiver of venue in such cases is
sanctioned by the rules on
jurisdiction."cralaw virtua1aw library
Still other precedents adhered to the same
principle.
12. Tantoco v. Court of Appeals, decided in
1977. 25 Here, the parties agreed in their
sales contracts that the courts of Manila
shall have jurisdiction over any legal action
arising out of their transaction. This Court
held that the parties agreed merely to add
the courts of Manila as tribunals to which
they may resort in the event of suit, to
those indicated by the law: the courts either
of Rizal, of which private respondent was a
resident, or of Bulacan, where petitioner
resided.
13. Sweet Lines, Inc. v. Teves, promulgated
in 1987. 26 In this case, a similar stipulation
on venue, contained in the shipping ticket
issued by Sweet Lines, Inc. (as Condition
14) —
". . . that any and all actions arising out or
the condition and provisions of this ticket,
irrespective of where it is issued, shall be
filed in the competent courts in the City of
Cebu"
— was declared unenforceable, being
subversive of public policy. The Court
explained that the philosophy on transfer of
venue of actions is the convenience of the
plaintiffs as well as his witnesses and to
promote the ends of justice; and considering
the expense and trouble a passenger
residing outside of Cebu City would incur to
prosecute a claim in the City of Cebu, he
would most probably decide not to file the
action at all.
On the other hand, in the cases hereunder
mentioned, stipulations on venue were held
to be restrictive, or mandatory.
1. Bautista v. De Borja, decided in 1966. 27
In this case, the contract provided that in
case of any litigation arising therefrom or in
connection therewith, the venue of the
action shall be in the City of Manila. This
Court held that without either party
reserving the right to choose the venue of
action as fixed by law, it can reasonably be
inferred that the parties intended to
definitely fix the venue of the action, in
connection with the contract sued upon in
the proper courts of the City of Manila only,
notwithstanding that neither party is a
resident of Manila.
2. Gesmundo v. JRB Realty Corporation,
decided in 1994. 28 Here the lease contract
declared that
". . . (V)enue for all suits, whether for
breach hereof or damages or any cause
between the LESSOR and LESSEE, and
persons claiming under each, . . . (shall be)
the courts of appropriate jurisdiction in
Pasay City. . ."cralaw virtua1aw library
This Court held that:" (t)he language used
leaves no room for interpretation. It clearly
evinces the parties’ intent to limit to the
‘courts of appropriate jurisdiction of Pasay
City’ the venue for all suits between the
lessor and the lessee and those between
parties claiming under them. This means a
waiver of their right to institute action in the
courts provided for in Rule 4, sec.
2(b)."cralaw virtua1aw library
3. Hoechst Philippines, Inc. v. Torres, 29
decided much earlier, in 1978, involved a
strikingly similar stipulation, which
read:jgc:chanrobles.com.ph
". . . (I)n case of any litigation arising out of
this agreement, the venue of any action
shall be in the competent courts of the
Province of Rizal."cralaw virtua1aw library
This Court held: "No further stipulations are
necessary to elicit the thought that both
parties agreed that any action by either of
them would be filed only in the competent
courts of Rizal province exclusively."cralaw
virtua1aw library
4. Villanueva v. Mosqueda, decided in 1982.
30 In this case, it was stipulated that if the
lessor violated the contract of lease he could
be sued in Manila, while if it was the lessee
who violated the contract, the lessee could
be sued in Masantol, Pampanga. This Court
held that there was an agreement
7
concerning venue of action and the parties
were bound by their agreement. "The
agreement as to venue was not permissive
but mandatory."cralaw virtua1aw library
5. Arquero v. Flojo, decided in 1988. 31 The
condition respecting venue — that any
action against RCPI relative to the
transmittal of a telegram must be brought in
the courts of Quezon City alone — was
printed clearly in the upper front portion of
the form to be filled in by the sender. This
Court held that since neither party reserved
the right to choose the venue of action as
fixed by Section 2 [b], Rule 4, as is usually
done if the parties mean to retain the right
of election so granted by Rule 4, it can
reasonably be inferred that the parties
intended to definitely fix the venue of action,
in connection with the written contract sued
upon, in the courts of Quezon City only.
An analysis of these precedents reaffirms
and emphasizes the soundness of the
Polytrade principle. Of the essence is the
ascertainment of the parties’ intention in
their agreement governing the venue of
actions between them. That ascertainment
must be done keeping in mind that
convenience is the foundation of venue
regulations, and that that construction
should be adopted which most conduces
thereto. Hence, the invariable construction
placed on venue stipulations is that they do
not negate but merely complement or add to
the codal standards of Rule 4 of the Rules of
Court. In other words, unless the parties
make very clear, by employing categorical
and suitably limiting language, that they
wish the venue of actions between them to
be laid only and exclusively at a definite
place, and to disregard the prescriptions of
Rule 4, agreements on venue are not to be
regarded as mandatory or restrictive, but
merely permissive, or complementary of
said rule. The fact that in their agreement
the parties specify only one of the venues
mentioned in Rule 4, or fix a place for their
actions different from those specified by said
rule, does not, without more, suffice to
characterize the agreement as a restrictive
one. There must, to repeat, be
accompanying language clearly and
categorically expressing their purpose and
design that actions between them be
litigated only at the place named by them,
32 regardless of the general precepts of Rule
4; and any doubt or uncertainty as to the
parties’ intentions must be resolved against
giving their agreement a restrictive or
mandatory aspect. Any other rule would
permit of individual, subjective judicial
interpretations without stable standards,
which could well result in precedents in
hopeless inconsistency.
The record of the case at bar discloses that
UNIMASTERS has its principal place of
business in Tacloban City, and KUBOTA, in
Quezon City. Under Rule 4, the venue of any
personal action between them is "where the
defendant or any of the defendants resides
or may be found, or where the plaintiff or
any of the plaintiffs resides, at the election
of the plaintiff." 33 In other words, Rule 4
gives UNIMASTERS the option to sue
KUBOTA for breach of contract in the
Regional Trial Court of either Tacloban City
or Quezon City.
But the contract between them provides
that." . . All suits arising out of this
Agreement shall be filed with/in the proper
Courts of Quezon City," without mention of
Tacloban City. The question is whether this
stipulation had the effect of effectively
eliminating the latter as an optional venue
and limiting litigation between UNIMASTERS
and KUBOTA only and exclusively to Quezon
City.
possession, or for partition or condemnation
of, or foreclosure of mortgage on, real
property" 37 were commenced in a province
or city other than that "where the property
or any part thereof lies," 38 if no objection is
seasonably made in a motion to dismiss, the
objection is deemed waived, and the
Regional Trial Court would be acting entirely
within its competence and authority in
proceeding to try and decide the suit. 39
WHEREFORE, the appealed judgment of the
Court of Appeals is REVERSED, the Order of
the Regional Trial Court of Tacloban City,
Branch 6, dated February 3, 1994, is
REINSTATED and AFFIRMED, and said Court
is DIRECTED to forthwith proceed with Civil
Case No. 93-12-241 in due course.
SO ORDERED.

In light of all the cases above surveyed, and

the general postulates distilled therefrom,
the question should receive a negative
answer. Absent additional words and
expressions definitely and unmistakably
denoting the parties’ desire and intention
that actions between them should be
ventilated only at the place selected by
them, Quezon City — or other contractual
provisions clearly evincing the same desire
and intention — the stipulation should be
construed, not as confining suits between
the parties only to that one place, Quezon
City, but as allowing suits either in Quezon
City or Tacloban City, at the option of the
plaintiff (UNIMASTERS in this case).

One last word, respecting KUBOTA’s theory

that the Regional Trial Court had "no
jurisdiction to take cognizance of . . .
(UNIMASTERS’) action considering that
venue was improperly laid." This is not an
accurate statement of legal principle. It
equates venue with jurisdiction; but venue
has nothing to do with jurisdiction, except in
criminal actions. This is fundamental. 34 The
action at bar, for the recovery of damages in
an amount considerably in excess of
P20,000.00, is assuredly within the
jurisdiction of a Regional Trial Court. 35
Assuming that venue were improperly laid in
the Court where the action was instituted,
the Tacloban City RTC, that would be a
procedural, not a jurisdictional impediment
— precluding ventilation of the case before
that Court of wrong venue notwithstanding
that the subject matter is within its
jurisdiction. However, if the objection to
venue is waived by the failure to set it up in
a motion to dismiss, 36 the RTC would
proceed in perfectly regular fashion if it then
tried and decided the action.

This is true also of real actions. Thus, even if

a case "affecting title to, or for recovery of